Fonterra Class Action Seeking Compensation for Dairy Farmers Filed in Supreme Court of Victoria
Compensation is being sought for the sudden price reduction and claw back announced on 5 May 2016 when Fonterra unilaterally reduced the milk prices for some farmers by around 70%. The conduct contributed to a crisis in the Australian Dairy industry, and caused “substantial detriment to dairy farm businesses” according to the Australian Competition and Consumer Commission (ACCC).
The case filed yesterday is for dairy farmers who Fonterra purchased milk from in 2015/2016. It will be run by lawfirms Adley Burstyner and Harwood Andrews, a 175 year old firm with strong rural and regional presence. The case will utilise information generated by the ACCC investigations.
The defendants are three Australian companies which are part of the global dairy conglomerate headed by Fonterra Co-Operative Group Limited, whose performance can be invested in via the Fonterra Shareholders Fund (ASX:FSF).
This is the first time that a Court is asked to evaluate Fonterra’s conduct and deliver compensation to the pool of 2015/2016 dairy farmers.
David Burstyner, the lawyer running the case, said:
“I've looked at the contracts and I've listened to farmers and seen ten months of Fonterra statements saying, with very limited exception, that the $5.60 price will be paid. The only answer I can come up with as to why the company clawed back is that they didn’t ask themselves, "Is it legal?", they asked themselves "Can I get away with it?
And it wasn’t even as if it was a question of survival, with the Fonterra Group posting $834m net profit after tax for the year ending 31 July 2016, up 65%.”
The Supreme Court Statement of Claim asks the Court to declare that:
Fonterra engaged in Misleading and Deceptive Conduct and Unconscionable Conduct, as defined in the Australian Consumer Law; and
Fonterra breached its supply contract, and its obligation to match the farmgate milk price of Murray Goulburn.
Court proceedings are an ultimate test of conduct and set important precedents. This case may be an important test of Unconscionable Conduct laws and protections for small business, like agricultural enterprises, from conduct of global corporations. Adley Burstyner hopes the case will decisively end clawbacks like occurred to dairy farmers in May 2016.
Group claim expert David Burstyner said “I have seen first-hand a great number of farmers distressed, wanting redress from Fonterra”
Farmers will not have to pay any costs of this case out of their own pockets because the case is funded by Litigation Lending Services, which has a 20 year track record.
Dairy farmers who supplied milk to Fonterra in the 2015/2016 season are able to register (link below).
Registration does not require a commitment from farmers to anything, and does not mean they have to pay anything. Registration simply ensures that farmers are kept in the loop about the case and about the opportunity to receive any money recovered. Registration will also play an important part in confirming the success and continuation of the case.
Hearings will now be scheduled in the class action, likely starting late July or August 2020.
David Burstyner said:
“There is nothing for companies to fear from class actions, except when they don’t want to fix misconduct. We’re all human, and we either take responsibility and pay for our mistakes or we get sued. Accepting responsibility early avoids being sued or at least ends a case early, avoiding the costs of court procedures. But if a company doesn’t accept responsibility, and digs in, then court action is reasonable.
Companies themselves benefit from being able to assert rights when they want to be a plaintiff – it wouldn’t be a just society or stable economy otherwise. Fonterra itself has access to the courts – it sues small farmers for loans, and Bega for commercial dealings. Dairy farmers should have the same access to justice, and a class action with litigation funding makes that possible.”
More information and the registration of interest form is available here: https://www.adleyburstyner.com.au/farmers-farm-gate-milk-price-action .
The Supreme Court Writ which summarises the case is available here: https://www.adleyburstyner.com.au/s/20200617-Writ-SEALED.pdf
The full statement of claim is available here: https://www.adleyburstyner.com.au/s/20200617- Statement-of-Claim-SEALED.pdf
The milk price reduction was covered on the 4 Corners programme, “Milked Dry” (http://www.abc.net.au/4corners/stories/2016/08/15/4516058.htm)
For further information and media enquiries contact:
David Burstyner
Principal. Director.
Adley Burstyner Dispute Lawyer M +61 411 072 743
E dburstyner@adleyburstyner.com.au www.adleyburstyner.com.au
Litigation Lending Services has 20+ years experience as a dedicated financier of court cases and, for example, is the company behind the Stolen Wages Class Action which achieved a $190m settlement last year. Under Supreme Court class action law, a judge has to oversee any outcome of the case, and assesses its fairness and reasonableness, including costs.